Johnson & Johnson to Acquire Proteologix, Inc. to Lead in Atopic Dermatitis Treatment
Johnson & Johnson (JNJ) has announced its acquisition of Proteologix, a biotechnology firm specializing in bispecific antibodies for immune-mediated diseases, for $850 million in cash, with additional milestone payments possible. Proteologix's pipeline includes PX128, entering Phase 1 trials for moderate to severe atopic dermatitis (AD) and asthma, and PX130, in preclinical development for AD. These therapies target IL-13, TSLP, and IL-22 pathways, aiming to deliver superior efficacy and patient convenience.
The acquisition aligns with JNJ's strategy to enhance its dermatology portfolio and address significant unmet needs in AD treatment. Proteologix's assets offer potential best-in-disease efficacy by targeting multiple disease pathways, addressing heterogeneous disease-driving factors in diverse patient populations.
- Acquisition cost: $850 million in cash with potential milestone payments.
- Pipeline includes PX128 (Phase 1 for AD and asthma) and PX130 (preclinical for AD).
- Targets multiple disease pathways (IL-13, TSLP, IL-22) for high efficacy.
- Potential to provide best-in-disease therapeutics for moderate to severe AD and asthma.
- Strategic portfolio addition with differentiated bispecifics.
- Addresses significant unmet needs in AD treatment.
- Infrequent dosing intervals for patient convenience.
- Strengthens JNJ's dermatology portfolio and capabilities in bispecific antibodies.
- High acquisition cost of $850 million may impact JNJ's short-term financials.
- PX128 and PX130 are still in early development stages (Phase 1 and preclinical).
- Uncertainty regarding the success of clinical trials for PX128 and PX130.
- Potential safety concerns due to immunosuppressive nature of advanced therapies for AD.
Insights
Johnson & Johnson's decision to acquire Proteologix for
Financially, this acquisition could provide a substantial return on investment if the bispecific antibodies prove effective in clinical trials and gain regulatory approval. However, investors should note the inherent risks of biopharmaceutical development, including the high costs of clinical trials and the possibility of regulatory hurdles. The potential for milestone payments adds a layer of uncertainty, dependent on the success of these developmental stages.
In the short term, the acquisition may not significantly impact J&J's stock price due to the costs and risks involved. However, in the long term, successful integration and development of Proteologix’s assets could position J&J as a leader in treating AD and other immune-mediated diseases, potentially driving higher revenues and profitability.
The acquisition of Proteologix brings promising additions to J&J's dermatology pipeline, particularly with the bispecific antibodies PX128 and PX130. These antibodies target IL-13, TSLP and IL-22, addressing multiple disease-driving pathways in atopic dermatitis and asthma. This approach could offer higher efficacy and remission rates compared to current treatments that target single pathways or broadly suppress the immune system.
PX128 and PX130's mechanism of action illustrates a shift towards more personalized and targeted therapies for heterogeneous diseases like AD. The ability to target multiple pathways simultaneously could reduce inflammation more effectively and offer a more durable remission. This could fill a significant unmet need, given that 70% of patients on existing therapies do not achieve remission.
Furthermore, the convenience of infrequent dosing intervals could improve patient adherence and overall treatment outcomes. However, the success of these therapies will depend on the outcomes of phase 1 and subsequent clinical trials, which are critical for assessing safety and efficacy. If these trials prove successful, J&J could set a new standard in AD and asthma treatment.
The market for atopic dermatitis treatments is currently dominated by therapies that either target single pathways or broadly suppress the immune system, both of which have limitations in efficacy and safety. Johnson & Johnson's acquisition of Proteologix positions the company to potentially disrupt this market with its bispecific antibodies that target multiple disease pathways.
The demand for more effective and safer AD treatments is substantial given the high number of patients not achieving remission with existing therapies. By addressing this unmet need, J&J could capture a significant market share. Additionally, the acquisition adds to J&J's strategic initiative to build a portfolio of differentiated bispecifics, which they can leverage across various immune-mediated diseases beyond AD and asthma.
For retail investors, this acquisition underscores J&J's long-term strategic vision and commitment to innovation in immunology. While the immediate financial impact may be minimal, the potential for long-term growth and market leadership in the AD sector is noteworthy. Monitoring the progress of clinical trials and regulatory approvals will be important for assessing the full impact of this acquisition.
Acquisition advances Johnson & Johnson’s leading Dermatology portfolio with opportunity to address significant unmet need in atopic dermatitis (AD)
Includes bispecific antibodies targeting proven disease pathways and offers the potential to provide best-in-disease therapeutics for people with moderate to severe AD and asthma
These pipeline additions demonstrate the Company’s strategic approach to build a portfolio of differentiated and complementary bispecifics to address multiple disease-driving pathways
Proteologix’s portfolio includes PX128, a bispecific antibody targeting IL-13 plus TSLP, which is ready to enter phase 1 development for moderate to severe atopic dermatitis (AD) and moderate to severe asthma, and PX130, a bispecific antibody targeting IL-13 plus IL-22, which is in preclinical development for moderate to severe AD. Since AD and asthma are both heterogeneous diseases with different disease-driving pathways in distinct patient subpopulations, targeting multiple pathways offers the potential to deliver high-bar efficacy and remission.
PX128 inhibits IL-13-mediated Th2 skin inflammation, an important disease-driving pathway in AD and asthma, as well as TSLP, a mediator of tissue inflammation in AD and asthma. Like PX128, PX130 inhibits IL-13-mediated Th2 skin inflammation. PX130 also inhibits IL-22 to restore the skin barrier and prevent inflammation from environmental triggers, such as allergens. Both assets are designed for infrequent dosing intervals, which offers convenience patients prefer. Together, these pipeline additions demonstrate a strategic approach to build a portfolio of differentiated and complementary bispecifics.
“Atopic dermatitis is the most common inflammatory skin disease, impacting more than 100 million adults worldwide,” said David Lee, Global Immunology Therapeutic Area Head, Johnson & Johnson Innovative Medicine. “About
In addition to PX128 and PX130, the acquisition will provide J&J with other bispecific antibody programs with applications across a variety of other diseases, which further boosts the Company’s capabilities to create novel bispecific programs.
“Integrating Proteologix bispecific antibodies into our pipeline is an important first step in fulfilling our commitment to people living with AD,” said Candice Long, Worldwide Vice President, Immunology, Johnson & Johnson. “We plan to continue expanding our reach and impact for people living with a wide variety of immune-mediated diseases, leveraging more targeted options for them to reach durable, symptom-free remission.”
About Atopic Dermatitis
Atopic dermatitis (AD), also referred to as eczema, is a chronic inflammatory skin disorder affecting more than 102.8 million children and 101.3 million adults worldwide.2 AD is characterized by an overactive immune system that causes skin inflammation and damage to the skin barrier, leaving it dry, itchy, and prone to subsequent skin infections. The condition can cause poor quality of life by impacting the ability to interact with family and friends, interrupting sleep due to intense itching and/or painful skin, leading to anxiety, stress and depression with an increased risk of suicide.3
About Asthma
Asthma is a chronic lung disease affecting 262 million4 people globally across all ages, sexes, ethnicities and races. The symptoms of asthma - coughing, wheezing, and difficulty breathing - are caused by inflammation and narrowing of the airways. Genetic and environmental factors have been linked to asthma development, and triggers, such as allergens and infections can start or worsen asthma symptoms. Severe asthma attacks can be life-threatening and may require emergency room visits and hospitalizations. While asthma can be managed by medications and avoiding triggers for most patients, there is currently no cure, and the burden of asthma on patients’ quality of life and on health resource utilization remains high.5
About the Merger Agreement
Under the terms of the transaction Johnson & Johnson (the Company) will acquire Proteologix. The transaction is expected to close mid-year 2024, subject to antitrust clearance and other customary closing conditions. The transaction is expected to be accounted for as a business combination and we do not anticipate any impact to our previously disclosed 2024 adjusted EPS guidance range.
About Johnson & Johnson
At Johnson & Johnson, we believe health is everything. Our strength in healthcare innovation empowers us to build a world where complex diseases are prevented, treated, and cured, where treatments are smarter and less invasive, and solutions are personal. Through our expertise in Innovative Medicine and MedTech, we are uniquely positioned to innovate across the full spectrum of healthcare solutions today to deliver the breakthroughs of tomorrow, and profoundly impact health for humanity. Learn more at https://www.jnj.com/ or at www.janssen.com/johnson-johnson-innovative-medicine. Follow us at @JanssenUS and @JNJInnovMed. Janssen Research & Development, LLC and Janssen Biotech, Inc. are both Johnson & Johnson companies.
Cautions Concerning Forward-Looking Statements
This press release contains “forward-looking statements” regarding the acquisition of Proteologix Inc. The reader is cautioned not to rely on these forward-looking statements. These statements are based on current expectations of future events. If underlying assumptions prove inaccurate or known or unknown risks or uncertainties materialize, actual results could vary materially from the expectations and projections of Johnson & Johnson or Proteologix Inc. Risks and uncertainties include, but are not limited to: the potential that the expected benefits and opportunities of the acquisition may not be realized or may take longer to realize than expected; challenges inherent in product research and development, including uncertainty of clinical success and obtaining regulatory approvals; uncertainty of commercial success for new products; manufacturing difficulties and delays; product efficacy or safety concerns resulting in product recalls or regulatory action; economic conditions, including currency exchange and interest rate fluctuations; the risks associated with global operations; competition, including technological advances, new products and patents attained by competitors; challenges to patents; changes to applicable laws and regulations, including tax laws and global health care reforms; adverse litigation or government action; changes in behavior and spending patterns or financial distress of purchasers of health care services and products; and trends toward health care cost containment. In addition, there will be risks and uncertainties related to the ability to successfully integrate the products and employees/operations and clinical work of Proteologix Inc., as well as the ability to ensure continued performance or market growth of Proteologix Inc.’s products. A further list and descriptions of these risks, uncertainties and other factors can be found in Johnson & Johnson’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023, including in the sections captioned “Cautionary Note Regarding Forward-Looking Statements” and “Item 1A. Risk Factors,” and in Johnson & Johnson’s subsequent Quarterly Reports on Form 10-Q, and other filings by Johnson & Johnson with the SEC. Copies of these filings are available online at www.sec.gov, at www.jnj.com or on request from Johnson & Johnson. Neither Johnson & Johnson nor any of the Johnson & Johnson MedTech entities undertakes to update any forward-looking statement as a result of new information or future events or developments, except as required by law.
Non-GAAP Financial Measures
This press release includes Adjusted EPS, which represents a non-GAAP financial measure. The Company believes that providing this non-GAAP financial measure enhances the Company’s and investors’ understanding of our financial performance. Non-GAAP financial measures should not be considered a substitute for, or superior to, financial measures determined or calculated in accordance with GAAP. The Company’s definitions of its non-GAAP financial measures may not be comparable to similarly titled measures reported by other companies. The most directly comparable GAAP measure to Adjusted EPS is earnings per share, or EPS. The Company is not providing a reconciliation of Adjusted EPS to EPS, however, because Johnson & Johnson does not provide GAAP financial measures on a forward-looking basis as the Company is unable to predict with reasonable certainty the ultimate outcome of adjusted items, such as legal proceedings, unusual gains and losses, acquisition-related expenses, and purchase accounting fair value adjustments without unreasonable effort. These items are uncertain, depend on various factors, and could be material to Johnson & Johnson’s results computed in accordance with GAAP.
1 https://pubmed.ncbi.nlm.nih.gov/27690741/
2 Global epidemiology of atopic dermatitis: a comprehensive systematic analysis and modelling study, British Journal of Dermatology 2023 Dec 20;190(1):55-61.
3 Association Between Atopic Dermatitis and Suicidality, A Systematic Review and Meta-Analysis, JAMA Dermatology, 2019, Feb; 155(2): 178-187.
4 https://www.who.int/news-room/fact-sheets/detail/asthma
5 https://www.cdc.gov/asthma/about/index.html
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Media contact:
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Source: Johnson & Johnson
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